Japan says it will wait until midnight on Thursday for South Korea to respond to its proposal to form a three-party arbitration panel to resolve disagreements about court rulings on wartime forced labor.

Japan's Deputy Chief Cabinet Secretary Yasutoshi Nishimura said on Thursday that Tokyo is strongly urging Seoul to agree to the establishment of the arbitration panel.

When asked what may happen if Seoul rejects the panel, as the presidential office earlier suggested it would, the Japanese official declined to comment.

Last November, South Korea’s Supreme Court ruled that Japanese firms must compensate Korean laborers forcibly conscripted to work without pay during World War II.

Tokyo challenges the validity of the cases, claiming that all reparation issues were settled in a 1965 bilateral treaty.